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Australian government orders Apple, Microsoft and Adobe to explain inflated local prices

Last year the Australian government pledged to investigate why consumers in the country are forced to pay more for downloads, and that has led authorities to summon Apple, Microsoft and Abode to explain their pricing strategies.

First Kotaku reported, the three tech giants have been instructed to send representatives (PDF) to discuss the matter at a House of Representatives hearing in capital city Canberra on March 22. There they will be asked a series of questions related to their local pricing policy. The firms face legal consequences if they fail to comply and attend the event.

MP Ed Husic, who is a member of the investigating committee, said it is high time for the firms to provide details of their multiple pricing.

These firms should have cooperated and been prepared to be more open and transparent about their pricing approaches. In what’s probably the first time anywhere in the world, these IT firms are now being summonsed by the Australian Parliament to explain why they price their products so much higher in Australia compared to the US.

Husic points out that, while the cost of TV sets and computers fell by an estimated 14 percent in Australia last year, the country’s consumer price index suggests that some digital and tech purchases are up to 60 percent more expensive than in the US.

This isn’t the first time that politicians have pressured tech firms to explain their pricing. The inquiry was ordered in April 2012, when the House of Representatives prepared an investigation aimed at getting comprehensive answers following an initial report.

Speaking last year, Husic said:

People here scratch their heads trying to work out why they get fleeced on software downloads. When the Productivity Commission asked IT companies why they charge so much for downloads, even they found the answers were not persuasive.

Australia isn’t the only country where consumers are expected to pay extra for software and hardware purchases, and pricing is thought to have led many in the country to register US-based addresses in order to buy items at American prices.

The three firms aren’t the only ones to charge more in Australia, Kotaku points out that games firm Steam, among others, does the same. The quizzing of these high profile examples could be a first step to reducing that.